The road to a digital future ought to be paved with good intentions! Or so the powers that be would have liked to have it! But CAS at best is a regressive intermediate step - a step that should have ideally led India to a Brave New Digital World.
Digital Direct Broadcast Services (DDBS) is the end game for a Broadcaster. Satellite or terrestrial-based delivery of digital streams with addressability is dream state for media business moguls - the proverbial pay-as-you-go paradigm, versus the hitherto free rider phenomenon that we have got blissfully used to!
Primarily with CAS, one is taking away a service which has been free and unregulated for most of ten years, and then replacing it with the burden of a price and cost structure not quite of one's choice or making! Unlike in the US where the raison d'etre for Conditional Access (CA) based Pay TV (HBO; 1975) was its offer of premium and special fare, over and above the regulated basic tier of services!
However, with rollouts and adoption of delivery of entertainment and information services over wireline and ether viz DTT, DAB, xDSL, LMDS, Cable Modem etc, the acceptance of a digital Set Top Box (STB) as standard household appliance is fairly obvious in the next couple of years.
At the same time, the customer can't pay for and install a server rack of various STBs, Receivers and Customer Premise Equipment (CPEs) to cater for various technologies, operators and content providers when they roll out their services! Therefore a 'STB' would need to perforce follow some semblance of open standards, common interface, and interoperability across providers, and upward compatibility for two-way interactive broadcast and broadband service - what can be defined as a Universal & Integrated CA' (UiCA). One is yet to see such a 'standards and protocol' initiative by Consumer Groups, Industry or Government to address, no doubt, technical issues of 'inclusiveness of delivery' and 'gateway'.
Instead, analogue STB is being pushed for basic CAS compliance with the option for a digital regime. For quite the same value and enhanced functionalities (Ref: Earlier centerpiece article in Business Standard; 10 June 2002) a digital and integrated STB for direct satellite services could have led to significant benefits to over 40 million C & S, Internet, PC and Broadband homes.
The new I & B and Telecom Ministers may well find it worthwhile to at least initiate some dialogue and debate on this.
LOSERS AND SHAKERS!
The flip side being that an entire value chain of distribution as currently understood would be turned on its head. The MSO and mid and local tier partners would in essence be eliminated from the distribution chain in one fell swoop, not to mention cables criss-crossing trees, rooftops and streets! This disintermediation would dramatically change the economics and cost structure of the broadcasting industry in general, and C & S segment in particular.
Certainly CAS will be a boon (read boom!) for many players - members of CETMA for starters, and there will be short and long-term economies and diseconomies for others.
Purely from a Media angle, the understanding of CPM and CPRP may drastically change as channels move from free and un-accounted, to pay and addressed. The must-carry channels will show no change, but the scramble for the 'paid' channel will drive audience reach, share and rate cards. While the name of the game may move from advertising- sponsored business model and underutilized inventory to subscription-based models, broadcasters will be hard put to maintain high rates both for advertising and subscription rates. Advertisers hopefully will be smart enough to realize that its 30-second ad is not going to be seen across all the homes that they currently plan for!
There will be fragmentation of audiences and emergence of segmentation 'spin' in the hope that a lower reach will perhaps imply precision marketing, and therefore translate into premium rates! On the whole, Media planners will need to recreate new value propostion in a falling mass (and hitherto unregulated) 'one size fits all' viewership market in the transition period - from now to June 2003. The main Broadcasters not to be left out will go hell-for-leather to promote their own channel segmentation strategy, and ready their bouquets (and pricing!) to remain 'Prime', and literally get into the 6.7 million C&S urban viewers face!
Ultimately, no one wants to be the 'idiot' who is left out of the 'box'!
To my mind, the huge bonanza will be for the free-to-air or must carry-channels. They could recapture lost ground as they can technically show 38 million C&S homes, or 75 million TV homes as the case may be. Whilst Doordarshan may have lost out to the private players in the ad sales pie in spite of competitive TRPs tilting in their favour. If they can get their act together, this share is expected to increase.
Convergence is a nice enough concept in White Papers and to occupy several Government Committees and Task Forces, but difficult in practice. Especially with the various elements of 'convergence' in a constant state of flux on account of technological innovations and fickle consumer tastes, needs & aspirations which move faster than Moore's Law! One just had to be present at the recent Consumer Electronics Show (CES) at Las Vegas to realize that!
Convergence at best is practised at the ground level in initiatives such as ensuring single point access for multiple delivery systems, last mile operators' migration & financing plan, etc.
In the meanwhile, the onus will need to be on Advertisers and Consumer Groups to remain alert in the transition period. As research databases reconcile with a priori hypotheses and media planners, analysts and broadcasters recalibrate their 'go-to-market' strategies in a CAS-enabled world.
Probir Roy has worked in Govt, MNC Broadcast and Advertising Cos at senior operating positions. He is currently Chief Strategy officer & Managing Partner at Waygate Capital specializing in TMT sector clients & investments.